Silicon Valley 2010: A new phase of uncertainty
Posted by Nicos Komninos at 12 February 2010 in Innovative Cities & Regions
The Silicon Valley 2010 Index just released from Joint Venture: Silicon Valley Network and Silicon Valley Community Foundation brings clear signs that the innovation engine of the region is slowing down and the Valley is entering a new phase of restructuring and uncertainty. Published annually since 1995, the Silicon Valley Index examines trends in five areas: People and talent flows; Economy and innovation; Society, education, and culture; Place, environment, land use, housing, and commercial space; and Governance.
The 2009 trends highlight that the “region has entered a new era of uncertainty in which our ability to attract top talent, fund innovation and preserve a decent quality of life is no longer guaranteed.”
Employment: “The region lost roughly 90,000 jobs between the second quarter of 2008 and 2009, bringing total employment down to 2005 levels.”
Patents: “The number of patents in Silicon Valley declined (though less than one percent from last year), while the total number of U.S. patents decreased by 2.6 percent.”
Funding: “Total venture capital investment was down in 2009.”
Technology: “Investment is shifting away from software and semiconductors. Growing areas of investment are in Industrial, Energy, Media & Entertainment, Biotechnology, and Medical Devices.”
Global competition: “Inflows from China and India continue to rise. Investment and collaboration between the Valley and those two nations is also on the rise, but India and China are experiencing rapid economic growth and as they do opportunities in those home countries will slow the flow of talent”
The Index (4MB): Silicon Valley-2010 Index
Source: Joint Venture: Silicon Valley Network
Nicos,
Thanks for the excellent post – sad but true. Some other sad facts include that there was no venture backed companies that went public in 2nd quarter of 2008. This had not happened since 1978. No VC backed companies going public in the 2nd and 3rd quarter of 2009 followed this up. The questions is why are we no longer innovating?
Since 2000 we have passed a number of laws and regulations that are killing innovation in the US. (see http://www.hallingblog.com) The incredible innovation of the 90s was based on technology start-up companies built on intellectual capital, financial capital, and human capital. All three of the pillars have been under attack since 2000. Our patent laws have been weakened reducing the value of intellectual capital. Sarbanes Oxley has made it impossible to go public reducing financial capital for start-ups and the FASB rules on stock options have made it harder to attract human capital to start-ups. The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation http://www.amazon.com/Decline-Fall-American-Entrepreneur-Regulations/dp/1439261369/ref=sr_1_1?ie=UTF8&s=books&qid=1262124667&sr=8-1, explains these problems in more detail.